This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.Need a new registration confirmation email? Click here

The letter defended Goldman's compensation practices and explained steps the firm has taken to ensure its soundness, while devoting little space to discussing business successes during the year or opportunities it is targeting.

The letter also devoted considerable space to addressing two hot-button issues for the securities firm: its relationship with
AIG(AIG - Get Report) and its successful bet against the U.S. housing market that allowed it to avoid the multibillion dollar write-downs taken by competitors such as
Morgan Stanley (MS - Get Report) and
Citigroup(C - Get Report) in late 2007 and through 2008.

With regard to AIG, Goldman critics in Congress and in the media have said Goldman should not have been repaid at 100 cents on the dollar on its exposures to the giant insurer after its massive government bailout, which
Bloomberg puts at $182 billion. Goldman got $14 billion from the
Federal Reserve after the government decided to prevent AIG from defaulting on its debts.

Goldman has consistently said it wouldn't have suffered significant losses if the government had not stepped in to support AIG. For example, $4.8 billion of that Goldman got from AIG after its bailout was for "highly marketable U.S. Government Agency securities," which Goldman held as collateral in exchange for a loan.

"If AIG hadn't repaid the loan, we would have simply sold the securities and received the $4.8 billion of value that way," the letter states.

Nonetheless, while the letter argues Goldman's "direct exposure to AIG was minimal," it acknowledges that "Goldman Sachs and every other financial institution and company benefitted from the continued viability of AIG."

Goldman may be ceding new ground here. It's hard to say, because the bank has addressed the issue so often it is virtually impossible to keep track of everything Goldman's top officials have said on the subject. It's also hard to care, since the fact has been obvious to everyone (except, apparently, Goldman executives) since AIG was initially bailed out.